New York Using Whistleblower Law as Part of Systemwide Effort To Pursue Tax Evasion Aggressively, According to Young Law Group

False Claims Act offers New York whistleblowers with evidence of tax fraud the opportunity to share in the recovery from its efforts by filing a qui tam lawsuit.

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Young Law Group, P.C.

Young Law Group, P.C.

Recent enforcement actions by New York demonstrate that the state is actively pursuing collection efforts against tax evaders and would be interested in evidence about others

Philadelphia, PA (PRWEB) April 30, 2014

New York State is actively pursuing businesses that have engaged in tax evasion and wealthy taxpayers who are hiding income offshore. The New York False Claims Act permits individuals to share in the proceeds from these enforcement efforts if they bring forth evidence of tax fraud that results in successful collection efforts from a taxpayer. Unlike many states which do not provide for rewards in tax cases, the law allows accountants, financial professionals and employees of businesses, as well as others who wish to do the right thing when they discover wrongdoing, an avenue to report their information to the government and seek recovery on behalf of their fellow taxpayers.

“Recent enforcement actions by New York demonstrate that the state is actively pursuing collection efforts against tax evaders and would be interested in evidence about others,” according to Eric Young, Esq., Managing Partner of Young Law Group, P.C. “Individuals who have evidence of deliberate evasion or underpayment of taxes, including sales tax, should consult a whistleblower attorney about the procedure for reporting to the government and the potential for a reward based on their information.”

Prior to 2010, New York State did not pay for tax tips. In 2010, New York removed the exemption for cases of tax fraud in the False Claims Act, permitting whistleblowers with evidence of businesses avoiding payment of income taxes or the state sale tax to file a lawsuit to share in the state’s recovery. New York is beginning to see results from the change of the law.

Attorney General Eric T. Schneiderman and New York settled a qui tam whistleblower lawsuit in March brought against Lantheus Medical Imaging Inc. by a tax service provider for alleged failure to pay New York State and City taxes in Anonymous v. Anonymous, case number 102892/2012, Supreme Court of the State of New York, County of New York. Lantheus agreed to pay $6.2 million in the settlement for engaging in business in New York without paying applicable taxes.*

New York is also pursuing a tax fraud lawsuit initially brought by a whistleblower against Sprint-Nextel Corp that claims Sprint-Nextel failed to collect state and local taxes on flat-rate access charges for wireless calling plans. It estimates that Sprint has allegedly failed to pay $130 million in taxes, resulting in a case for damages of nearly $400 million.** The lawsuit is People of the State of New York et al. v. Sprint Nextel Corp. et al., case number 103917-2011, in the Supreme Court of the State of New York, County of New York.

New York’s use of the False Claims Act appears to be part of a systemwide effort to pursue cases of tax fraud. The Department of Taxation and Finance collected 5 percent more in evaded taxes in the 2013-14 fiscal year than it did the prior year.*** The increase of approximately $200 million brought the total achieved through enforcement programs for the year to $3.9 billion. Additionally, the Department of Financial Services, led by Superintendent Benjamin M. Lawsky, is also conducting an investigation into whether Credit Suisse aided taxpayers in tax evasion. A dual purpose of the inquiry, according to the New York Times, is to recover tax revenue lost by the State of New York. ****

“The real victims of tax fraud are the taxpayers who diligently and honestly pay their taxes every year,” said James J. McEldrew, III, Esq., Of Counsel at Young Law Group, P.C. “Individuals who come forward and tip the government to fraud are performing a public service. The False Claims Act recognizes the valuable contribution they make to society.”

About Young Law Group, P.C.

Young Law Group represents whistleblowers reporting tax evasion, securities fraud and health care fraud to the U.S. Government and various state governments, including New York. For a free confidential consultation about a potential case, please call Eric L. Young, Esq., at (800) 590-4116.

Eric L. Young, Esq., Managing Partner of Young Law Group, represented the first whistleblower awarded compensation by the IRS under the mandatory reward program created following the Tax Relief and Health Care Act of 2006. Young has also served as an expert witness in areas of U.S. whistleblower law and represented clients in some of the largest qui tam recoveries including United States ex. rel. Lucia Paccione v. Cephalon Inc., E.D.P.A., 03-CV-6268.

Additional information about Young Law Group, P.C. can be found at http://eganyoung.com

For attribution purposes: * http://www.ag.ny.gov/press-release/ag-schneiderman-announces-62-million-settlementwith-lantheus-medical-imaging-bristol

** http://www.ag.ny.gov/press-release/ag-schneiderman-wins-right-proceed-groundbreaking-tax-fraud-lawsuit-against-sprint

*** http://nypost.com/2014/04/16/ny-claws-back-3-9b-in-evaded-taxes/

**** http://dealbook.nytimes.com/2014/04/06/credit-suisse-is-said-to-be-facing-double-barreled-inquiries/


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